Question
What is your opinion on this statement based on the idea of what audit steps would you perform to evaluate the contract bidding process? When
What is your opinion on this statement based on the idea of what audit steps would you perform to evaluate the contract bidding process?
When evaluating the contract bidding process an auditor should first make a preliminary survey on the purchasing and contracting function by interviewing key personnel involved in the procurement process, reviewing policy and procedure manuals and determining the kinds of reports received by the key managers. The auditor should gain an understanding of applicable procurement laws and regulations, become familiar with the entity's purchasing policies, and flow chart the procurement process showing key decision points.
Auditor should then plan the audit approach based on the preliminary survey and perform the specific audit steps. The audit steps regarding contract bidding should ensure procedures used maximized competition and resulted in awards to the lowest responsible and responsive bidder. Detailed written specifications or clear purchase descriptions are needed to ensure that all contractors are bidding on the same item. These audit objectives include formal advertising or invitations to bid, where bids are solicited to ensure adequate competition by means of advertisement. Security over bids to ensure they are kept in a secure location and formally opened and recorded. Adequacy and effect of competition ensures a tabulation sheet is maintained of bids received and the amount bid. Was the bid awarded to the lowest and responsive bidder? Did only on bidder respond to solicitation? Were the amounts above or below architect/engineer estimates? Is justification provided if the award was made to the bidder other than the lowest bidder?
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